Review - STB Publishes Response to Freight Rail Service Hearing

Yesterday, the Surface Transportation Board (STB) published a Decision (EP 770.1) in response to hearing testimony and written testimony submitted under STB Docket EP 770. According to the Digest of the Decision:

“The Board is requiring service recovery plans and progress reports from the four largest U.S. rail carriers and is directing those carriers to participate in biweekly conference calls to further explain efforts to correct service deficiencies.

The Board is also requiring all Class I rail carriers to report more comprehensive and customer-centric performance metrics and employment data for a six-month period. In response to concerns raised at the recent hearing and related communications, the Board is taking this action to inform its assessment of further actions that may be warranted to address the acute service issues facing the rail industry and to promote industry-wide transparency, accountability, and improvements in rail service.”

Commentary

While it may look like the Surface Transportation Board is kicking the can down the road, this dual data collection effort is an important step forward in addressing what is inherently a very complicated problem. The STB already collects a large mass of information from the railroad. The added data will provide a better look at the scope of the current problem and the six-month time frame will provide for a baseline upon which to compare the results of any future actions the Board may order to rectify the problems.

Unfortunately, these service problems are going to continue. The four problem Class 1s are unlikely to make significant changes to their management programs that appear to have been successful from the point of view of profitability. I suspect that they will continue to focus on the difficulty of hiring additional personnel. If that is successful (and that may be very difficult in the current economic situation), it will not address the process management issues that appear to underly many of these service issues.

With the other three Class Is operating in the same economic environment, and not exhibiting anywhere near the same level of service problems, it seems clear that there are other root causes of the existing problems. Hopefully, the new reporting requirements will help the STB to identify what those root causes are.

For more details about the new reporting requirements, see my article at CFSN Detailed Analysis - https://patrickcoyle.substack.com/p/stb-publishes-response-to-freight - subscription required.